Get the latest news, research, commentary and analysis on what is impacting your quality of life. From top scholars to regular citizens, this blog’s contributors make the latest in empirical research on economic freedom accessible and easy to understand, issue by issue.
Why America is in Decline
Economic freedom allows us to choose how to produce, sell, and use our own resources, while respecting others’ rights to do the same. Living in a society with high levels of economic freedom leads to higher incomes, lower poverty, less unemployment, longer life expectancies, and cleaner environments, among a host of other benefits. More economic freedom improves well-being and leads to a higher quality of life.
Economic freedom in America is on the decline. The Economic Freedom of the World Report, published annually by the Fraser Institute, gives countries an economic freedom ranking based on things like the size of government, access to sound money, and how heavily regulated the country is. In 2001, America was rated #3 in the world, but in the latest report we have fallen to #10. And this downward trend is projected to continue in the coming years. Countries with a higher economic freedom ranking tend to be places which have a higher standard of living, so America’s decline could indicate that our standard of living may soon be decreasing.
Why has our ranking fallen? What exactly has changed in the past decade to make our economic freedom rating drop? Answering these questions is important if we want to stop the slide. This series of posts will give you the details of the decline, taking a close look at the Fraser Institute’s report to see where America’s score has changed.
The Five Areas
The Fraser Institute’s Economic Freedom of the World Index judges each country in the five following areas:
- Size of Government: Expenditures, Taxes, and Enterprises;
- Legal Structure and Security of Property Rights;
- Access to Sound Money;
- Freedom to Trade Internationally;
- Regulation of Credit, Labor, and Business.
America has decreased in every single one of these areas since 2000, both in the score given for each area and in comparative terms to the rest of the world. Each of these five areas has subgroups, and over the next few weeks we will be highlighting where the most significant drops in our score have occurred.
If we know exactly why American economic freedom is decreasing, we can try to prevent any further decline, and then being working to increase our economic freedom.